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2007 Supreme(Gau) 822
IN THE HIGH COURT OF GAUHATI (SHILLONG BENCH)
Tinlianthang Vaiphei, J.
Adisons Constructions Ltd.
Vs.
Union of India (UOI) and Ors.
W.P. (C) Nos. 199, 200, 217 and 218 (SH) of 2007
Decided On: 14.12.2007
For Appellant/Petitioner/Plaintiff: N. Choudhury and H.S. Thangkhiew, Advs.
For Respondents/Defendant: S.C. Shyam, Adv.
The main legal point established in the judgment is that the parties had agreed to settle their dispute by arbitration, and the court emphasized the availability of the remedy of arbitration as provided in the arbitration clause.
Headnote:
Cancellation of Contract - Construction Work - Clause 54(d) of General Conditions of Contract - Arbitration Clause
Fact of the Case:
The petitioner challenged the validity of the cancellation of the contract works for construction of 'Provision of OTM ACCN for ARC at Shillong' and 'Provision of OTM ACCN for 58 GTD Happy Valley at Shillong'. The petitioner alleged delay in handing over the work sites, approval of construction materials, and restrictions on the entry of men and materials on the work sites, resulting in non-completion of the works contract in time.
Finding of the Court:
The court found that the cancellation of the contract was made by the Respondent authorities in terms of Clause 54 of the General Conditions of Contract, which empowers the Accepting Officer to cancel the contract for the contractor's default. The court also noted that the parties had agreed to settle their dispute by arbitration, as provided in Clause 70 of the General Conditions of Contract.
Issues: The issues raised by the petitioner were related to delay in handing over the work sites, approval of construction materials, and restrictions on the entry of men and materials on the work sites.
Ratio Decidendi: The court held that the disputed questions of fact and breach of contract were matters to be decided by an arbitrator, as agreed upon by the parties in the arbitration clause. The court also emphasized that the remedy of arbitration was available to the parties and should be pursued instead of approaching the court under Article 226 of the Constitution.
Final Decision: The court dismissed the writ petitions and directed the parties to bear their respective costs. The court also dismissed the petitions against the NITs issued after the cancellation of the work orders, as the findings in the earlier writ petitions governed these petitions as well.
T. Vaiphei, J.
1. This bunch of writ petitions, which are inter-connected, were taken up together for hearing and are being disposed of by this common judgment.
2. In WP (C) No. 217 (SH) 2007 and WP (C) No. 218 (SH) 2007, the Petitioner is challenging the validity of the cancellation of the contract works for construction of "Provision of OTM ACCN for ARC at Shillong" and "Provision of OTM ACCN for 58 GTD Happy Valley at Shillong". Whereas WP (C) No. 217 (SH) 2007 and WP (C) No. 218 (SH) 2007 pertain to fresh tenders issued by the Respondent-authorities in connection with the aforesaid work orders.
3. The Petitioner was awarded by the Respondent-authorities the work order for the construction work titled as "Provision of OTM ACCN for ARC at Shillong". The period of completion of this construction work in terms of the tender notice dated 24.4.2003 was stipulated for 24 months from the date of handing over the site. However, in terms of the work order issued on 25.9.2004, the Respondent-authorities divided the construction work in three phases. The date of commencement of Phase-I and Phase-III was scheduled for 11.10.2004 whereas the dates of completion for Phase-I and Phase-II were fixed for 10.07.2005 and 10.10.2006 respectively. The date for commencement of Phase-II was fixed at 11.10.2005 and the date of completion was scheduled for 10.10.2006. In respect of the construction work titled "Provision of OTM ACCN for 58 GTD Happy Valley at Shillong", the construction work was divided in two phases. The Petitioner was also awarded this work. The date of commencement of Phase-I was scheduled for 4.10.2004 and the date of completion thereof was fixed for 3.7.2005, whereas the date of commencement of Phase-II was scheduled for 4.10.2004, the date of its completion was fixed at 3.10.2006. In terms of the work order dated 23.09.2004, the Respondent-authorities were to hand over open and clear sites for Phase-I to the Petitioner on 3.10.2004, while the date of handing over the site for Phase-II was stipulated at 3.10.2004. Except for some variations here and there, the basic facts in two cases are substantially one and the same. To cut short the discussion and to simplify the controversy involved in the two cases, it would be convenient to first deal with the facts in WP (C) No. 217 (SH) 2007.
4. The case of the Petitioner is that the Respondent-authorities ought to have handed over open and clear sites to it much before the commencement of the work to facilitate mobilization of labours, machinery and materials and for erection of sheds for such mobilization, but the Respondent-authorities could not hand over open and free sites before the date for commencement of the work order. As a result, it could not erect the required sheds for mobilization of men and materials. This led it to request the Garrison Engineer by the letter dated 16.12.2004 for allotment of suitable places for raising labour sheds for the work allotted in Phase-I and to vacate the building standing over the site. This letter was not even replied to, whereupon it on 21.01.2005 requested the Garrison Engineer to hand over the ARC headquarter building to expedite the construction work, which also remained unreplied. According to the Petitioner, even after taking over possession of the sites on piecemeal basis, the approval of the layout of building or buildings by the concerned authority were necessary before actual commencement of construction work. Similarly, it was also necessary to provide electricity and water connection to the sheds by the Respondent-authorities before commencement of actual construction work, but the sheds were provided to it only on 20.03.2005 i.e. after a period of five months. It is alleged by the Petitioner that some delay was caused in the matter of according approval by the concerned authorities on the materials to be used in construction work: for example, on 28.3.2005, sand and stone chips were approved: on 19.3.2005, pest control was
